Hunnu Coal release Tsant Uul coking coal project drilling results

Hunnu Coal has announced the results of coal quality analyses performed on samples taken from the due diligence drill cores at the Tsant Uul coking coal project. Tsant Uul is within 40 km of the giant Tavan Tolgoi coking coalfield in the Umnugobi Province of southern Mongolia.

Initial test results demonstrate similarities to coals at the giant Tavan Tolgoi field. An extensive drilling programme is to commence in the coming weeks with the aim of generating initial JORC resources and further coal test work. Hunnu recently acquired a 90% interest in the Tsant Uul project, which covers over 59,000 ha. in the South Gobi Coal Province of southern Mongolia.

The Tavan Tolgoi coking coalfield is estimated to contain over 6 billion t of coking and thermal coal. Energy Resources LLC mines approximately 2 million t of raw coking coal from its UHG mine, which is 45 km to the north of the Tsant Uul project.

Energy Resources also has plans to increase the production at the UHG mine to 15 million t in 2013, while building a 5 million t coal washing plant and power plant on its minesite. Tavan Tolgoi Stock Holding Co., listed on Mongolian Stock Exchange, also mines raw coking coal and exports to China, while the state-owned Erdenes MGL LLC owns the surrounding five mining licenses with approximately 6 billion t of coking and thermal coal.

The company's drilling programme included seven diamond core holes, five of which intersected multiple coal seams ranging from 0.5 – 25.22 m in thickness starting from as shallow as 7.8 m from the surface. Drilling core samples were analysed at Alex Stewart Laboratory in Mongolia for the coal parameters. The coal quality analyses showed:

Total moisture: 5% to 6.9%

Ash: 15.2% to 36%

Volatile Matters: 26.1% to 29.6%

Fixed Carbon: 36.2% to 50.7%

Sulfur: 0.3% to 0.55%

Qdaf: 6990 kCal/kg to 7,66 kCal/kg

CSN: 0 to 1.5.

The company has estimated an exploration target of 50 million t to 100 million t of coal for the Tsant Uul project.